On Friday, the U.S. is expected to activate levies on $34 billion in Chinese-made goods, with Beijing expected to respond with its own levies on U.S. goods.

“As he ratchets up the trade conflict with China, President Trump’s protectionism will inevitably start to damage the global economy,” said Dario Perkins, managing director at TS Lombard. “Markets are understandably skittish and a protracted period of tension could both undermine the macro outlook and produce a much nastier endgame.”

Shares of Boeing, Deer and Cisco all fell at least 0.6 percent.

The major indexes jumped at the open on Thursday, with the Dow surging nearly 200 points, after Reuters reported that the U.S. ambassador to Germany told industry executives that President Donald Trump could hold off on implementing tariffs on European cars in exchange for concessions. General Motors shares rose as much as 2.6 percent before trading 0.7 percent higher. Fiat Chrysler also rose 5.7 percent.

Tech shares jumped on Thursday, as Micron climbed 1.3 percent. The company confirmed China is blocking some chip sales, but noted the situation will only have a minor impact on its revenue. Shares of Facebook, Apple, Alphabet and Amazon also rose.

The Federal Reserve released a summary of its most recent meeting. The summary showed the central bank was worried that letting the economy run too strong could lead to a "significant economic downturn."

At the last meeting, in June, the Fed increased its benchmark short-term interest rate by a quarter percentage point. In addition, the central bank signaled that two more rate hikes were expected to occur by year's end.

The minutes were released after data from ADP and Moody's Analytics showed jobs grew by 177,000 in June, missing expectations. Jobs growth for May was revised higher, however.

Weekly jobless claims rose unexpectedly last week to 231,000, but the overall trend still suggests a tightening labor market. The data were released ahead of the government's monthly payrolls report, which is due Friday.